Looming challenge for southern Sudan: Regulating oil companies

The optimism that filled most of southern Sudan after a largely peaceful referendum this month did not extend to the contested border town of Abyei.
By Rebecca Hamilton
Friday, February 11, 2011; 11:33 PM

IN BENTIU, SUDAN At an oil field in southern Sudan's oil-rich Unity state, a tar-colored sludge flowed out of the back of a truck into a man-made pool.

A mile down the road, the flags of China, Malaysia, India and Sudan - the nationalities of the companies operating the field - fluttered in the breeze.

The state Environment Ministry fears that when it rains, the pool overflows and contaminates groundwater. "But we are only a new ministry, so it is hard for us to be sure," said James Gatluak, the ministry's director general, adding that he has no budget and a staff of two.

As a land ravaged by decades of war prepares to become an independent nation this summer, many southern Sudanese are pinning their hopes for prosperity on oil. Sudan is the third-largest oil-producing country in sub-Saharan Africa, and 80 percent of the oil lies in the south.

But regulating the industry will be among the new government's biggest challenges, experts say, raising questions about whether the oil deposits in one of the world's poorest regions will benefit the people who live there.

Since the 2005 peace agreement that ended the civil war with the north, the semiautonomous southern government has received more than $8 billion for its share of oil revenue. But only when the region officially becomes independent in July will southern officials begin dealing directly with the companies operating here.

The details of how these contracts will be handled are still under discussion, but the state minister for the environment, William Garjang Gieng, said independence will give his fledgling ministry great leverage over the industry.

Rees Warne, a natural resources expert with Catholic Relief Services, which works in Sudan, warned that disparities "in power, knowledge and experience" between oil companies and new governments make it difficult to monitor and enforce environmental standards.

'The water is not okay'

Oil has long been synonymous with death and displacement in Unity state, which includes some of the region's richest oil fields.

In the 1990s, militias backed by the Sudanese government in Khartoum worked to clear southern land for oil exploration, carrying out campaigns of violence to displace people here.

"Those in the north wanted to push people away from where the oil was, and they didn't care what happened to them," Gieng said.

Today, oil represents a different set of problems here.

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